India to use SC order to defend itself in Devas case

The Indian government will use the Supreme Court order upholding liquidation of Devas Multimedia Pvt. to challenge the enforcement of arbitration awards being sought by the company in courts across the world.

“We will fight to the end,” Finance Minister Nirmala Sitharaman said at a press meet in New Delhi. “We are grateful to the Supreme Court to bring out a detailed judgment… the loss [arbitration award] shall not be borne by the Government of India.”

The liquidation process of Devas, the finance minister said, will now proceed as per the law.

The top court on Monday upheld the winding-up order against Devas—a company with a $1.3-billion award against Antrix Corp. The winding-up petition was filed by Antrix, the commercial arm of ISRO and fully owned by the Indian government, in January last year.

In May, the National Company Law Tribunal ordered to wind up Devas on grounds that the company was incorporated in a fraudulent manner to siphon off funds to dubious foreign accounts. The appellate tribunal upheld the decision in September. Then the case landed in the Supreme Court, which, too, rejected all the points raised in challenge to the ruling of the tribunals.

Devas’ efforts to pursue arbitration award
Despite the Supreme Court’s decision, Devas’ overseas shareholders are pursuing enforcement of arbitral awards in other countries.

Most recently, a Paris court awarded Devas’ shareholders a lien on an apartment that houses the Indian deputy chief of mission. Just before this, Devas Mauritius Ltd., Devas Employees Mauritius Pvt. and Telecom Devas Mauritius Ltd. got a favourable order from the Superior Court in the district of Montreal, Quebec. The court has allowed the shareholders’ plea to seize property belonging to the Airports Authority of India and Air India, held by the International Air Transport Association.

It won arbitration proceedings before the International Chamber of Commerce in 2015, resulting in an award of $1.3 billion against Antrix. The PCA award directed India to pay $111 million plus interest and costs.

Devas has been using these favourable arbitral awards against India in foreign jurisdictions. BloombergQuint